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The Three Stages of Closing a Mortgage

You've been approved for a mortgage today, there's a 30-day interest rate lock period until you close the loan, and now it's time to get serious. 

Closing a loan involves the processing of paperwork and the payment of fees to complete the mortgage transaction between you and your lender, and to transfer ownership of the property from the seller over to you.

The Weeks Leading up to the Closing Date

It is important to know where everybody affiliated with the deal stands, which makes communication vital to close on a house. The players most likely to be involved are the lender (mortgagee), the closing agent, the title company, the escrow agent, the attorney(s), the seller, the real estate agent, and you (the buyer and mortgagor). The list could include couriers, surveyors, recorders, inspectors, and appraisers but they're not absolutely vital if you've gotten this far.

To avoid a communication breakdown between all that are involved, speak to your real estate agent, they will keep you in the loop of any new developments regarding the deal since they are the middlemen connecting you to everybody else.

The Days Leading up to the Closing Date

Compile all the paperwork you've received from your seller and lender and all the documents that you're required to produce before closing. Apart from your attorney, what you need to bring on the day of includes the following:

  • Cashier's or certified check.
    Personal checks or hard cash won't be accepted at the closing table. For information on the costs involved with closing a loan, click here.
  • Closing Disclosure statement.
    This form will be given to you a few says before closing. At five pages long, the form explains your estimated monthly costs, the loan term, and the fees that cover the processing of your loan application.
  • Identification.
    Any photo ID is enough to prove your identity.
  • The sales contract.
    Not essential to closing but necessary if you need to confirm anything regarding the property in question, the sales contract discloses all the information you need.
  • Proof of insurance.
    Some lenders require the borrower to put forth an insurance policy on the property.

The Day of Closing

You're two to three hours into sealing the deal, and you're about to sign all the documents regarding ownership of the property and mortgage. There can be up to 24 documents that need your signature, the most important of which are listed in the table below.

The Two Sets of Documents that Require Your Signature
The Property Related Closing Documents The Mortgage Related Closing Documents
 1. HUD-1 Settlement form  1. Promissory note
 2. Certificate of Occupancy  2. Mortgage or deed of trust
 3. Abstract of Title
 4. Declaration of Reports  3. Truth in Lending statement (also known as Regulation Z)
 5. Proration papers
 6. Warranty deed or title  4. Monthly payment letter


You've done it! Now that you've signed all the documents pertaining to your ownership and loan obligations, the keys to the home are yours.

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